Great post, but there is slight problem with number 5 (supposed to be 6?). RSS is great for those that understand it, but what about those who don't? The vast majority of internet users have no idea what RSS is or how to use it. I think it is time content owners looked for other mechanisms of distribution to reach the mainstream audience. I think in your video scenario, a streaming mode will win. Why? People understand services, not feeds.
Jim McCoy
· 3 years ago
I am curious as to which way you break when it comes to some of the issues you address that have a bit of built-in cognative dissonance.
Issue #3 (whose principles seem to be implied in #1 and #4) has a problem: in order for the user to be unable to avoid the ads they cannot be given complete control of the content. This mandates some sort of viable DRM. Commercial DVDs force you to sit through the "coming attractions" by using DRM; when I rip the DVD to make a copy the removal of UOP codes happens automagically along with region unlocking, etc. To prevent users from skipping the ads or editing the content to remove the ads it becomes necessary to use some form of DRM (in this case the "R" that is being managed is the content creators mandate that you have to watch the ad to get to the feature.)
Which desire trumps the other? Ad-supported content or DRM-less content?
Marina Architect
· 3 years ago
Indeed, you are on the money in your insight. Makes total informed sense.
I would add that what about the ability to distill (through the nose, just kiddin'--you know what I mean) what open source crews add to the mix. Or am I livin' in a string theory parallel universe.
Also, I have to give you some credit for appreciating Google Video: now that's what I call an embarassment to commen sense!
Charlie Crystle
· 3 years ago
Free is good. Until you're the content creator, where people get value out of the content, but don't click on the ads. When people stop clicking--the equivalent of flipping to a movie during the Super Bowl--you stop making money in this model. The only likely way is through CPM ads, at which point the content creator becomes so dependent on the large corporations who will market and advertise for brand almost indiscriminately that it affects the content.
People actually do pay for value--ALL THE TIME. iTunes is a paid model and it works. You pay for the software you use, even when you think you haven't; it's called a "bundle". The audience will tire of ad-supported everything, CTR will not go away but it will no longer be the engine of growth it is today, and microchunking might happen but it won't be monetized through ads for very long; the audience will tire first.
So free is good. But it's just a tactic.
Daniel Hallac
· 3 years ago
I second Jim's comment above on ad-supported vs DRM-less content. Let me raise another issue:
Image you download a series of ad-supported music and then have to suffer through a commercial between every song! It would make FM radio feel like satellite. Now, how long do you think it will take for someone to develop a program that strips the ads out of the media? I give it 24 hours after the first programmer has to live through the above scenario.
I just don't think it will work. You use DVDs as an example. Well most people I know hate the mandatory commercials (ask any parent who is trying to get the movie on while their kid is screaming in the background). We paid for the disc, why are we forced to view the ads?! Someone will come up with an easy way to strip out the the ads. And when they do, most people will use it and the model will break.
Robert Walch
· 3 years ago
Fred,
I would still like to interview you for my podcast, to talk about the future you see for podcasting.
Let me know if you are interested.
rob @ podCast411
Ricardo Arias-Nath
· 3 years ago
Fred, interesting post, completely in-line with what we are seeing in the marketplace. Although conceptually I am in agreement with you, I difer on how to implement such as business model, at least in the immediate future.
Our current research suggests that 10% to 15% of users are willing to pay for content if it's very relevant for them; the other 85% rather interact with an advertiser to get access to the content.
In my opinion, you need to de-couple consideration (how do you pay for the content) with the content itself. So it is not really about new variable DRM systems but more about mechanisms for obtaining 'credits' that can be used towards media purchases. So from a consumer standpoint, a decision can be made on either purchasing credits with money or interacting with advertisers to get them. That's the model that is working for us at Tokenzone.
The other benefit of this system is that it is way easier to manage. You can add and remove advertiser interactions easily without having to deal with dynamic content changes.
Eric Dawson
· 3 years ago
You got me thinking and I like it. But I wish I had some answers to offer.
I think the "realities" might be better described as "guidelines".
Content - wants to be free. It's natural state. DRM and advertising get in the way. But I think all of the models will work.
Content can create brand. And if your brand is more lucrative than your content, you are probably wise to give your content away for free. What's this and your personal blog about anyway?
But I like your model. and it transcends content, I would broaden it to apply to services.
1 - Microchunk it
2 - Free it
3 - Syndicate it
4 - Monetize it
ie unbundled web services driven real estate
etc. web services for faxing. VoIP. Digital Printing. Data Processing. CPU. Travel...
All Comments
Great post, but there is slight problem with number 5 (supposed to be 6?). RSS is great for those that understand it, but what about those who don't? The vast majority of internet users have no idea what RSS is or how to use it. I think it is time content owners looked for other mechanisms of distribution to reach the mainstream audience. I think in your video scenario, a streaming mode will win. Why? People understand services, not feeds.
I am curious as to which way you break when it comes to some of the issues you address that have a bit of built-in cognative dissonance.
Issue #3 (whose principles seem to be implied in #1 and #4) has a problem: in order for the user to be unable to avoid the ads they cannot be given complete control of the content. This mandates some sort of viable DRM. Commercial DVDs force you to sit through the "coming attractions" by using DRM; when I rip the DVD to make a copy the removal of UOP codes happens automagically along with region unlocking, etc. To prevent users from skipping the ads or editing the content to remove the ads it becomes necessary to use some form of DRM (in this case the "R" that is being managed is the content creators mandate that you have to watch the ad to get to the feature.)
Which desire trumps the other? Ad-supported content or DRM-less content?
Indeed, you are on the money in your insight. Makes total informed sense.
I would add that what about the ability to distill (through the nose, just kiddin'--you know what I mean) what open source crews add to the mix. Or am I livin' in a string theory parallel universe.
Also, I have to give you some credit for appreciating Google Video: now that's what I call an embarassment to commen sense!
Free is good. Until you're the content creator, where people get value out of the content, but don't click on the ads. When people stop clicking--the equivalent of flipping to a movie during the Super Bowl--you stop making money in this model. The only likely way is through CPM ads, at which point the content creator becomes so dependent on the large corporations who will market and advertise for brand almost indiscriminately that it affects the content.
People actually do pay for value--ALL THE TIME. iTunes is a paid model and it works. You pay for the software you use, even when you think you haven't; it's called a "bundle". The audience will tire of ad-supported everything, CTR will not go away but it will no longer be the engine of growth it is today, and microchunking might happen but it won't be monetized through ads for very long; the audience will tire first.
So free is good. But it's just a tactic.
I second Jim's comment above on ad-supported vs DRM-less content. Let me raise another issue:
Image you download a series of ad-supported music and then have to suffer through a commercial between every song! It would make FM radio feel like satellite. Now, how long do you think it will take for someone to develop a program that strips the ads out of the media? I give it 24 hours after the first programmer has to live through the above scenario.
I just don't think it will work. You use DVDs as an example. Well most people I know hate the mandatory commercials (ask any parent who is trying to get the movie on while their kid is screaming in the background). We paid for the disc, why are we forced to view the ads?! Someone will come up with an easy way to strip out the the ads. And when they do, most people will use it and the model will break.
Fred,
I would still like to interview you for my podcast, to talk about the future you see for podcasting.
Let me know if you are interested.
rob @ podCast411
Fred, interesting post, completely in-line with what we are seeing in the marketplace. Although conceptually I am in agreement with you, I difer on how to implement such as business model, at least in the immediate future.
Our current research suggests that 10% to 15% of users are willing to pay for content if it's very relevant for them; the other 85% rather interact with an advertiser to get access to the content.
In my opinion, you need to de-couple consideration (how do you pay for the content) with the content itself. So it is not really about new variable DRM systems but more about mechanisms for obtaining 'credits' that can be used towards media purchases. So from a consumer standpoint, a decision can be made on either purchasing credits with money or interacting with advertisers to get them. That's the model that is working for us at Tokenzone.
The other benefit of this system is that it is way easier to manage. You can add and remove advertiser interactions easily without having to deal with dynamic content changes.
You got me thinking and I like it. But I wish I had some answers to offer.
I think the "realities" might be better described as "guidelines".
Content - wants to be free. It's natural state. DRM and advertising get in the way. But I think all of the models will work.
Content can create brand. And if your brand is more lucrative than your content, you are probably wise to give your content away for free. What's this and your personal blog about anyway?
But I like your model. and it transcends content, I would broaden it to apply to services.
1 - Microchunk it
2 - Free it
3 - Syndicate it
4 - Monetize it
ie unbundled web services driven real estate
etc. web services for faxing. VoIP. Digital Printing. Data Processing. CPU. Travel...